Senate Bill 5192 would raise per‑pupil MSOC funding; districts cite rising insurance and utility costs

The Senate Appropriations Committee received a staff briefing and extensive public testimony on engrossed substitute Senate Bill 5192, which would raise the per‑pupil state allocation for materials, supplies and operating costs (MSOC) and change several technical elements of how MSOC is calculated and reported.

Why it matters: MSOC covers non‑staff operating costs such as utilities, insurance and classroom supplies. Testifiers from districts large and small described growing MSOC deficits driven by rising insurance premiums and utility costs, and said they had been using local levy funds to cover basic operating needs.

James Maxson, committee staff, summarized the bill. The bill increases the general education MSOC amount beginning in the 2025–26 school year (staff referenced amounts by per‑pupil dollar increases), removes subcategory amounts from statute in favor of a single per‑pupil amount for general education and a single amount for grades 9–12, and requires districts beginning in 2026–27 to report MSOC expenditures by set categories to OSPI. It also changes enrollment counts used for MSOC from the current‑year annual average FTE to a three‑year average and ties MSOC inflation indexing to the same implicit price deflator (IPD) used for salaries. Maxson noted OSPI’s fiscal estimate of roughly $184 million in the 2025–27 biennium and $430 million over a four‑year outlook.

School leaders and advocacy groups testified in support. Sandy Hayes, a school board member and past WOSDA president, told the committee rising insurance costs forced North Shore School District to consider cuts to deans and assistant principals. Bellevue Superintendent Kelly Aramaki said her district’s MSOC deficit was $8.6 million and the bill would halve that gap; she said the district faced broader budget deficits that have led to staff reductions. Shoreline PTA advocacy chair Mallory Larson said her district’s unreserved fund balance would be negative by 2026 without additional MSOC funding. Other speakers — including superintendents, district finance chiefs and parent and student advocates — provided examples of schools using levies to buy basic supplies, paying staff reductions, or facing unsafe building conditions when routine maintenance and supplies go unfunded.

Supporters argued the bill improves predictability (three‑year averaging) and aligns inflation adjustments with salary calculations to reduce year‑to‑year funding swings. Opposing testimony was limited in the hearing record; staff briefing and many district representatives urged that funding be preserved or increased in the budget.

Committee action: staff provided fiscal estimates and invited testimony; no committee vote was recorded during the hearing. Proponents asked the committee to preserve the bill’s funding levels in budget negotiations.